SEC Registered Offering Reform and Filer Status Proposals

Summary

SIFMA ¹ provided comments to the U.S. Securities and Exchange Commission's (SEC) on its registered offering reform proposal ² and its proposal to enhance disclosure accommodations and simplify the filer status framework for reporting companies ³ SIFMA's membership includes underwriters, placement agents and dealers for issuers of all sizes that seek to raise capital in the public markets in the United States. These are the perspectives from which SIFMA submits these comments. As further discussed in this letter, SIFMA strongly supports both proposals but recommends that the Commission make certain revisions, particularly as it relates to the proposed "ineligible issuer" concept, to further advance the Commission's goals of promoting capital formation and encouraging companies to go and stay public.

Excerpt

We commend the Commission's efforts to modernize the registered offering process and rationalize the filer status framework in a manner that facilitates capital formation while maintaining investor protection. The proposed rules, if adopted, would facilitate access to the capital markets and significantly reduce compliance burdens for newly public companies and smaller issuers. Together with the Commission's other contemplated reforms, including its anticipated Regulation S-K reform, ⁴ the proposed rules represent the most significant changes to the Commission's registered offering and disclosure framework since at least the securities offering reform over 20 years ago. We believe the proposed rules would advance the Commission's stated goals to facilitate capital formation and help encourage companies to go and stay public. However, we recommend revising particular aspects of the proposals to further advance these goals, and-in the case of the proposed disqualification of certain "ineligible issuers" from using Form S-3-to prevent potentially severe and disproportionate consequences for some issuers that currently are Form S-3 eligible. We agree with the Commission's fundamental proposition that Form S-3 eligibility should focus on an issuer's status as a current and timely reporting company, rather than on seasoning, public float or other qualitative criteria. ⁵

We address both the Offering Reform Proposal and the Filer Status Proposal in this single letter because they share overarching objectives. Our comments are consistent with SIFMA's longstanding advocacy in favor of efficient access to the public capital markets6 and are intended to provide recommendations on how the Commission could, with respect to particular aspects of the proposals, achieve its objectives more effectively.